One of the world's most premium car brands has delayed the launch of its highly anticipated electric vehicle amid concerns around the uptake of zero emission cars.
Porsche has announced that its new electric vehicle will not hit the market, with the planned car being released as an internal combustion engine and plug-in hybrid version.
Parent company Volkswagen said the delay was in response to "the significantly slower growth of the demand for exclusive battery-electric vehicles".
By scrapping the release of the new electric car, Volkswagen has warned the delay will deliver a €5.1billion (£4.4billion) hit to the group's operating profit.
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Volkswagen said it would write down the value of its shares in Porsche by €3billion (£2.6billion) and see operating profits take a €2.1billion (£1.8billion) hit.
A new range of electrified vehicles from the luxury car maker was planned for the next decade, although the timeline of new vehicles is now unknown.
In a statement, Volkswagen chief executive Oliver Blume confirmed that VW would be "realigning" Porsche across the board.
He continued: "Today we have set the final steps in the realignment of our product strategy.
READ MORE: Porsche unveils groundbreaking wireless charging technology for highly anticipated new electric car
Porsche said it would be delaying the release of its new electric car
|REUTERS
"We are currently experiencing massive changes within the automotive environment."
This is not the first time that Porsche has backed away from its previous electric goals, having previously aimed for 80 per cent of sales to be electric by the end of the decade.
A statement released by the German automaker last year stated that it could now deliver on the 80 per cent target if consumer demand improves.
The so-called "double strategy" of producing both internal combustion engines and electrified models will continue into the future.
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Dr Jochen Breckner, chief of finance and technology at Porsche, said: "With this clear plan, we are recalibrating the company for long-term success in a world with challenging conditions.
"We recognise that these strategic investments weigh on our short-term financial results - but they are essential."
Car makers have also been cautious of the threat from up-and-coming Chinese brands, which are quickly growing markets across the world.
One of the largest Chinese brands on the global market, BYD, is rapidly gaining popularity with its range of affordable and high-tech electric vehicles, while also offering plug-in hybrid models for drivers who are not yet ready to make the switch.
Porsche is set to roll out the use of breakthrough wireless charging technology for its electric cars | PORSCHEOther Chinese brands are also having an impact in the UK, including Jaecoo and Omoda, alongside newcomers like Chery and Changan.
Despite the difficulties in selling electric cars, Porsche has maintained an impressive sales record in the UK so far this year.
Porsche has registered 11,516 new vehicles between January and August, representing 0.91 per cent of the total market share and a healthy 5.9 per cent increase in sales compared to last year.
Porsche recently announced that it would be launching groundbreaking wireless charging technology alongside its new Cayenne electric vehicle.